When a company consistently retains part of its earnings and demonstrates a history of profitability, it’s a good indicator of financial health and growth potential. This can make a business more appealing to investors who are seeking long-term value and a return on their investment. Most software offers ready-made report templates, including a statement of

The more time that the inventory remains on the shelves, the longer the company’s cash is held and cannot be used for other operations and hence costing the company extra money. While both ratios provide valuable insights into a company’s inventory management practices, they focus on different aspects. DSI is focused on the speed of

Remember, the normal balance is the side (debit or credit) that increases the account. For asset accounts, such as Cash and Equipment, debits increase the account and credits decrease the account. A debit balance is an account balance where there is a positive balance in the left side of the account. The entries would be

As you move through the year and consume the insurance, your prepayment gets used up. The term “prepaid” means the portion of the insurance premium that has not been used up as at the date of the balance sheet. Likewise, the company can make insurance expense journal entry by debiting insurance expense account and crediting